Now that 2021 is officially closed out, I wanted to put together a 2021 year in review. But since this is a new blog, I think a more in-depth recap of the last several years of our financial and life progression is necessary for this audience to get more context of what our road to now looked like.
2017 | The First Year My Wife and I Combined Our Balance Sheet
|Net Worth||$ (180,000)||$ (113,000)|
|Investable Assets||$ 81,000||$ 108,000|
|Gross Income||– – –||– – –|
|Student Loan Balance||$ 298,000||$ 266,000|
|Expenses excl. Student Loans||– – –||– – –|
My wife graduated from dental school and we both started new jobs in a new city. We didn’t start tracking our combined balance sheet until the end of Q2, or June 30, 2017. Our net worth was -$180k driven by the nearly $300k in dental school loans, partially offset by my savings and investments.
Our combined income at this point was around $210-220k per year, pretty solid for a twenty-something couple in the Midwest, though the student loan burden was a bit daunting. We made a plan to pay it down aggressively and were throwing around $5k/month at the loans.
We also bought a house in our new city. I’ll need a separate post to go through our home ownership experience as there’s a lot to write about. For whatever reason we had it in our minds that we should buy a home.
We got an offer accepted on said house and it had some issues come up in the inspection. We very nearly backed out, but ultimately negotiated on price and required the seller to have some of the work done.
Looking back, we should have backed out of the deal and rented instead, but we didn’t. We could have negotiated more off the purchase price. We ended up spending around $6k making some repairs shortly after buying it. At that time in our lives, $6k was a lot of money and gave me a ton of anxiety. The house combined with the significant student loan debt stressed me out (much more than I should have allowed) as it felt like we weren’t making as much progress on our finances as I would have liked.
Ultimately, it ended up being a solid home for us in a great location that we lived in for about four years before selling it this year. It had some deferred maintenance, which certainly impacted where we ended up pricing it.
Home drama aside, we settled into our new city and new jobs, and by the end of the year our net worth was -$113k, a $67k improvement in six months. Having a negative six figure net worth still didn’t feel good, but we at least made some progress and whittled the student loans down to about $266k. Our investable assets (defined here as cash + retirement accounts + brokerage accounts) started at $81k and ended at $108k six months later.
2018 | A Positive Combined Net Worth
|Net Worth||$ (180,000)||$ (113,000)||$ 3,000|
|Investable Assets||$ 81,000||$ 108,000||$ 170,000|
|Gross Income||– – –||– – –||$ 212,000|
|Student Loan Balance||$ 298,000||$ 266,000||$ 213,000|
|Expenses excl. Student Loans||– – –||– – –||$ 33,700|
Our salaries in 2018 were very similar to 2017, in the $210-220k per year range. My company had rules around length of service for bonus eligibility so I didn’t get any bonuses in 2018. My wife’s office was still growing its patient base and she was only making her base salary as that was higher than the set % of the work she performed.
This was a point of frustration as they didn’t have a lot of patients for her which meant she wasn’t going to be making very much money. On the flip side, she had great hours and less stress.
I was enjoying my job and liked it quite a bit more than where I’d been previously. The company was more of a mid-sized publicly traded company as opposed to the very large, bureaucratic place I was at. I was able to have an impact on the company and its decisions, as well as get involved in a lot of different aspects of the company. This was a welcome change from being a cog in the wheel of a large organization, where you’re siloed into a very limited role.
2018 was the first year we tracked our expenses on a combined basis and our total spending (excluding student loans) was $33.7k. As mentioned in my expense tracking post, this was right around where we have been / aimed to be.
We continued to aggressively pay down student loans, which went from $266k at the beginning of the year to $213k by the end of it. Much of what my wife made after taxes and 401k contributions went to paying down student debt. In hindsight, putting all that money into the market would have been a better financial decision, but it’s easy to say that now. Having $300k of student loan debt weighs on you psychologically, and it felt great to have lowered it by as much as we did.
By the end of the year, our net worth had improved from -$113k to $3k—an increase of $116k and, more importantly, a POSITIVE net worth! We were thrilled. It felt like a significant milestone and it was. Our investable assets (cash + retirement accounts + brokerage accounts) went from $108k to $170k—the market pullback at the end of 2018 hampered this growth a bit.
2019 | Steady Progress
|Net Worth||$ (180,000)||$ (113,000)||$ 3,000||$ 201,000|
|Investable Assets||$ 81,000||$ 108,000||$ 170,000||$ 303,000|
|Gross Income||– – –||– – –||$ 212,000||$ 227,000|
|Student Loan Balance||$ 298,000||$ 266,000||$ 213,000||$ 162,000|
|Expenses excl. Student Loans||– – –||– – –||$ 33,700||$ 35,400|
Our income in 2019 was slightly higher, coming in around $227k. I got a promotion that year, but my wife’s job was still in a similar situation and she made the same income as the previous year.
We again continued to pay down student loans, with the balance decreasing from $213k at the beginning of the year to $162k by the end of it. Having this under $200k felt great and that amount began to feel a lot more manageable.
By the end of 2019, our net worth was $201k, an improvement of $198k vs the end of 2018. Our investable assets rose from $170k to $303k. Our expenses (excluding student loans) in 2019 were $35.4k compared to $33.7k in 2018.
Oh yeah, we also got married after about five years of dating! We had a very simple and small wedding, which was exactly what we wanted. Big weddings aren’t for everyone, and they certainly weren’t for us. We’re glad we stayed true to ourselves and didn’t try to have a wedding that others wanted or expected.
2020 | Significant Income and Net Worth Increases
|Net Worth||$ (180,000)||$ (113,000)||$ 3,000||$ 201,000||$ 505,000|
|Investable Assets||$ 81,000||$ 108,000||$ 170,000||$ 303,000||$ 587,000|
|Gross Income||– – –||– – –||$ 212,000||$ 227,000||$ 336,000|
|Student Loan Balance||$ 298,000||$ 266,000||$ 213,000||$ 162,000||$ 151,000|
|Expenses excl. Student Loans||– – –||– – –||$ 33,700||$ 35,400||$ 33,000|
What a year…it was slow and fast all at the same time. COVID-19 gripped the world and stopped everything in its tracks. My wife’s office shut down for a period of time while I worked from home for a few months.
I was back in the office pretty early compared to most companies. I was in the office part time beginning in the summer and full time by September. The entire company wasn’t necessarily like this, but our department was, for whatever reason.
My wife’s practice really started to take off and her income began to grow substantially. I was also promoted again in the second half of 2020 and was fortunate in that my company actually benefited from the pandemic. Unfortunately, 2020 is also when I started to dislike my job more and more, a trend which has continued through the present day. The money is good, but the work environment is neither fun nor sustainable.
Job dissatisfaction aside, these occurrences in our professional lives allowed our gross income to increase dramatically, from $226k in 2019 to $336k in 2020.
We were also very fortunate as federal student loan interest and payments were paused beginning in March. We have a mix of federal student loans and privately refinanced student loans, but a larger portion were federal student loans which allowed us to bank or invest that money rather than throw it at the student loans the way we had done. By the end of the year, our student loan balance was $151k compared to $162k at the end of 2019.
With significantly higher incomes, dramatically reduced student loan payments, and a booming stock market, our net worth grew from $201k at the end of 2019 to $505k at the end of 2020. Our investable assets went from $303k at the end of 2019 to $587k by the end of 2020. Our expenses (excluding student loans) were $33.0k compared to $35.4k in 2019.
This is when our cash balance really started to accumulate, getting to $186k by the end of the year, a problem that has only gotten bigger (a first class problem, indeed). Throwing all that cash into the market as soon as we earned it would have been the best choice, but we didn’t. We did, however, set up automated investing in 2020, something I wish we’d done years earlier.
It was a wild year for us, as it was for everyone. It felt like a decade and we were glad when it was done.
2021 | Best Financial Year Yet…Is It Sustainable?
|Net Worth||$ (113,000)||$ 3,000||$ 201,000||$ 505,000||$ 966,000|
|Investable Assets||$ 108,000||$ 170,000||$ 303,000||$ 587,000||$ 1,073,000|
|Gross Income||– – –||$ 212,000||$ 227,000||$ 336,000||$ 519,000|
|Student Loan Balance||$ 266,000||$ 213,000||$ 162,000||$ 151,000||$ 146,000|
|Expenses excl. Student Loans||– – –||$ 33,700||$ 35,400||$ 33,000||$ 40,400|
This year was another wild ride, with COVID still impacting society, but not quite as harshly as 2020. This was a phenomenal year for our financial life; so good, in fact, that it will be hard to beat.
We ended up selling our house (lived there ~4 years, the only house we’ve ever owned) into the hot real estate market and renting an apartment instead. We didn’t love being homeowners and figured now made as much sense as any time to sell. So far, we love apartment life—no maintenance or worries to deal with!
As I mentioned, my company’s business was positively impacted by the pandemic and we ended up getting very strong bonuses. My wife’s practice had an absolutely phenomenal year and her income skyrocketed. Our gross income for 2021 was $519k compared to $336k in 2020 and $227k in 2019.
Student loan interest and repayments were still paused throughout the year, allowing us to once again bank or invest those funds. Our student loan balance at the end of the year was $146k vs $151k at the beginning of the year. The decrease in balance is only because of the continued payment on our refinanced, low interest rate private student loan.
Our net worth increased to $966k at the end of year compared to $505k at the end of 2020. Investable assets ended at $1.07M vs $587k in the prior year—some of the increase in investable assets was from our home equity now considered as investable while it was previously illiquid.
Our expenses (excluding student loans) were $40.4k, higher than any year since we started tracking our expenses on a combined basis, and compared against $33.0k in 2020. Around $4,500 of this was related to repairs and such that we did before putting our home on the market. We expect expenses to likely be in the high $30k range for 2022.
Our cash and cash equivalents balance grew from $186k at the end of 2020 to $365k by the end of 2021. I know that time in the market beats timing the market, but that sure is tough to execute psychologically when the market returns have been so strong for so long. This surely can’t continue, right? I have my eye on a few ways to put this cash to work so I’ll keep you updated on that!
Our financial year was better than I ever could have imagined. We keep thinking that something has to go wrong, there’s no way this can continue. The insane market returns are certainly a big factor as well and that is very unlikely to continue at anywhere near this pace.
I hope seeing the last five years of our financial lives was helpful to you. We made incredible progress on our net worth and on our path to financial freedom. Our income increased at a blistering rate while our expenses stayed relatively low, allowing us to save and invest significant sums of money. We made more progress this year than even my wildest hopes. I hope hearing more about our journey will help and motivate you to continue down the path of financial independence. It isn’t easy, but it’s worth it!